Commonwealth Trade v European Union (EU) Trade - The UK’s economic future resided in the ‘Commonwealth’ and not the European Union (EU), even before the Referendum vote was made

      

The UK’s economic future resided in the ‘Commonwealth’ and not the European Union (EU), even before the Referendum vote was made.

For according to the ‘World Economics – Measuring Global Economic Activities’, the Commonwealth of nations is growing rapidly in economic comparison to the EU.

The following is a reproduction of the Comparison from the World Economics website.

Indeed measured by share of the World’s GDP, the Commonwealth overtook the (1973) European Union in 2004 and by the same measure, the Commonwealth is slightly larger than the current Eurozone (March 2016).

Real GDP Growth 1970 – 2015 (year on year % change)

Economic growth in the Commonwealth has accelerated over the post 1973 period in sharp contrast to the EU, where the growth rate has been falling gently from an average of 3.6% in the 1970’s to only 0.7% in recent years.

http://www.worldeconomics.com/papers/Commonwealth_Growth_Monitor_0e53b963-bce5-4ba1-9cab-333cedaab048.paper

But looking at the Eurozone, EU and Commonwealth from  a market share of world GDP viewpoint, a similar pattern is evident. Charts 3 and 4 show the Eurozone and EU compared with Commonwealth share of world real GDP.

Commonwealth and Europe share of world real GDP (PPP, Million $) 1971-2015

http://www.worldeconomics.com/papers/Commonwealth_Growth_Monitor_0e53b963-bce5-4ba1-9cab-333cedaab048.paper

Future population growth

Finally, the chart below shows estimated population trends for the Eurozone compared to the Commonwealth for the 2015-2050 period. As can be seen, population growth in the Commonwealth alone is expected to rise by 30.4% over this period, whereas the Eurozone population is expected to fall by 1.9%.

 

http://www.worldeconomics.com/papers/Commonwealth_Growth_Monitor_0e53b963-bce5-4ba1-9cab-333cedaab048.paper

Definitions

• The Eurozone is defined as full members in 2015: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, Netherlands, Portugal, Slovak Republic, Slovenia, and Spain.
• The EU is defined as full members of the EU in 1973: Belgium, Denmark France, Germany, Ireland, Italy, Luxembourg, and Netherlands (UK omitted).
• The Commonwealth is defined in both charts as all members minus the UK. Due to difficulty in obtaining GDP data for certain small countries (Nauru) – this has  been purposely omitted from the Commonwealth calculations. These are estimated to account for under 1% of Commonwealth GDP.
• New members who have joined & left the Commonwealth since 1973 account for less than 1% of its total GDP. In both charts the EU/EZ start with a much larger share, but this advantage is shown to have steadily diminished over time, actually reversing in the original EU area, and clearly about to reverse using the Eurozone definition.

Note: GDP calculations are based on Real GDP PPP data from the World Economics Global GDP Database . For additional information please consult the World Economics Global Growth Tracker.

The Commonwealth Growth Monitor: Note to Users

Use of these data should be made in the recognition that World Economics shall not have any liability for these data or bear any responsibility for any actions taken based on these data, and in no event shall be liable for damages of any sort arising from use of these data.  

(End of World Economics’ Data)

Therefore on all levels, trade with our Commonwealth makes full sense and where the UK’s future does not reside within the European Union as EU proponents have been stating for years.

Therefore the sooner we are out of the internal market, the better it will be for the people of the United Kingdom. All it takes is belief in ourselves and to look forward to a new era of trade deals with “The WORLD” including our continually economically growing Commonwealth (expected to be nearly 85% of the total economic global output excluding the EU based upon 2020  projections by the IMF Economic Outlook (April 2016).

If President-Elect Trump can bring Russia closer together with trade,  it will bring the Commonwealth of Independent States (CIS) into the equation also and where the UK with its ties with such Putin friendly nations like Kazakhstan, can benefit economically. The CIS’s combined GDP was $2.732 trillion in 2012 and estimated at $3.35 trillion in 2017. Therefore the UK has to look to not just the Commonwealth for trade deals post BREXIT, but with other combinations such as the CIS. But added to this, the whole of South-East Asia region that has the highest economic potential in the world is now open to us fully. Overall why settle for trade deals that restricts  like the EU to a mere projected 15% of the world’s GDP by 2020, when 85%  of the world’s GDP is open to the United Kingdom, should have been our politicians thinking (+ of course if EU has any common sense at all, trade with their countries as well). For it is time that the EU opened up its eyes and realised that trading with Britain can only be positive for them.

Indeed, our politicians like Heath et al must have been mad to sign us up to such a draconian and insular trade bloc that has no-where to go, but where of course, politicians always know best. In this case they clearly did not and where UK taxpayers have paid into the EU the current-day value equivalent of around £500 billion. The big question is due to the ineptitude of our political leaders from Heath to Blair and to Cameron, what Britain would have been like if that vast amount of money (£500,000,000,000) had been invested in the Country itself. I consider that it would have transformed the nation into a ‘dynamic’ one at the forefront of 21^st century technology and not the relatively slow-growth economy that we have today. Time as they say will tell, but my money is on that BREXIT will prove in time to be the greatest positive decision that the United Kingdom and its people have ever made. 

Dr David Hill

CEO, World Innovation Foundation

15 January 2017

References:

World Economics - http://www.world-economics-journal.com/Information/AboutWorldEconomicsJournal.efp

The EU has shrunk as a percentage of the world economy - https://fullfact.org/europe/eu-has-shrunk-percentage-world-economy/

European Commission slashes UK 2017 growth forecast in half due to Brexit - http://www.independent.co.uk/news/business/news/european-commission-slashes-uk-2017-growth-forecast-in-half-a7407136.html

Trade opportunities for Commonwealth post-Brexit - http://thecommonwealth.org/media/news/trade-opportunities-commonwealth-post-brexit

European Union vs Commonwealth – Comparative Study - http://www.australiaunwrapped.com/2016/05/11/european-union-vs-commonwealth-comparative-study/

Commonwealth dream looms in Brexit campaign - http://www.bbc.co.uk/news/business-34855940

Economic Snapshot for the CIS Countries - http://www.focus-economics.com/regions/cis-countries

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